NEWS LETTER JUNE 2018

Transcription

1 JUNE Dear Readers, It gives me immense pleasure to introduce our monthly newsletter starting from June. The newsletter is aimed at updating you on various key developments in the exchange and its ecosystem. As you know, we commenced our market operation last year in August with the launch of the world s first diamond derivatives. Now we are geared up to add few more commodity contracts of high economic relevance for the Indian economy viz Petrol & Diesel. I encourage you all to share your feedback so as to enrich the content. Mr. Sanjit Prasad (MD & CEO) INSIDE THE ISSUE Thank you. ICEX ECOSYSTEM PARTNERS Diamond Performance at ICEX Trading Technology Key Developments in Diamond Industry Currencies and Commodities Performance ICEX in Media Grading & Testing of Diamond Exchange Developments Economic Indicators May Vaulting & Logistics Content: Edited By: Mr. Anish Vyas Mr. Amit Pathania Mr. Pradeep Mishra Shri Narayanan Venkatraman (Retail Client, Chennai) receiving Physical Delivery of 1 Carat + 1 Carat Stones from ICEX Chief Editor & Publisher: Mr. Sanjit Prasad, MD & CEO, ICEX

2 Commodity In Focus: DIAMOND Diamond is the hardest substance on Earth. Under the immense heat and pressure far below the earth s surface, the carbon atoms bond in a unique way, resulting in diamonds beautiful and rare crystalline structure. Diamonds have been valued and coveted for thousands of years. They are known particularly for their use in jewellery, such as rings or necklaces, because of their durability and lustre. However, most diamonds are used industrially. Because of their hardness, diamonds are extremely useful when used to cut, grind, or drill other materials. There is evidence that diamonds were being collected and traded in India as early as the fourth century BC. Most natural diamonds are formed at high temperature and pressure at very low depths of 140 to 190 kilometres in the earth s mantle. It normally takes 1 billion to 3.3 billion years (25% to 75% of the age of the Earth) to form a diamond. The US, China and India are major diamond jewellery consumers, driving rough-diamond demand. Major diamond mines are in Botswana, Zimbabwe, Namibia, South Africa, Angola, Russia, Canada and Australia Top six diamond mining companies are De Beers, ALROSA, Rio Tinto, SODIAM, Petra Diamond and Domion Diamond. They account for more than 70% of global production by volume. More than 50% of the world s production of rough, polished and industrial diamond passes through Antwerp (Belgium) - the major global trading place of diamond. Major cutting and polishing countries of diamonds are Belgium, Israel, USA, India and China. The first three are considered high-cost centres with focus on high-end stones, while India and China are considered as the cost-efficient centres. USA, Japan, China, Gulf region and India constitute approximately 70% of diamond jewellery sales. Diamond is economically very important and share of India is 94% of the global diamond business. Gross export of cut & polished diamond from India is US $22,784 million & it imports US $17,080 million worth of diamond annually. To provide hedging and price discovery tool to the Indian diamond industry, ICEX launched Diamond Futures Contract on 28 th Aug 17, the only exchange in the world to offer Diamond Derivatives. The potential for Diamond Futures turnover is estimated in the range of Rs.12,000 to Rs.18,000 cr per day. PAGE 2

3 Parameters of Diamond Quality Carat (Weight of the stone) Colour Clarity Cut Shape Symmetry & Polishes Diamond Shapes Carat and Size of Diamond stones Width in mm PAGE 3

4 Colour Grade of Diamond DIAMOND CUT GRADING EXCELLENT Crown Pavillon Culet Fluorescence Symmetry Excellent Symmetry V. Good Symmetry (table off center) Good Symmetry (facets misaligned) PAGE 4

5 Diamond Derivatives Trade at ICEX Diamond Contracts Total Volume v/s Open Interest Aug Sep Sep Sep Sep Oct Oct Oct Oct Oct Nov Nov Nov Nov Dec Dec Dec Dec Jan Jan Jan Jan Feb Feb Feb Feb Mar Mar Mar Mar Apr Apr Apr Apr Apr May May May May-18 Volume (in Lots) Open Interest(in lots) Contract (01-May-18 to 31-May-18) Jun-18 Jul-18 Aug-18 Delivery Contract 1 Ct.50 Ct Monthly Open Month Monthly Avg. Volume (in 000) Nov Dec Jan Feb Mar Apr May Feb Mar Apr May Monthly High Total Delivery in Carat Monthly Low Monthly Close Total Value (Rs. Lacs) Total Monthly Volume Monthly Average OI ICEX 1 carat diamond made a physical delivery of carats in Apr 18 contract. For May 18, the contract s total physical delivery of 1 carat stood at carats. On the other hand, 0.5 carat total physical delivery stood at 5.64 carats and 2.37 carats in Apr 18 and May 18 contracts respectively. In case of total value for 1 carat of Apr 18, the contract accounted for Lacs and Lacs in May 18 contract. While in 0.5 carat total value was seen 8.37 Lacs in Apr 18 and 3.60 Lacs in May 18 contracts respectively. Further, the tick size of DIAMOND 1CT and DIAMOND 0.5CT has been revised to 0.5 and 0.25 paisa respectively from existing 1 Rupee. Please refer the below table for detailed explanation. PAGE 5

6 Diamond Demand Hits $82B High - Global consumer demand for diamond jewellery grew 2% to an all-time record of $82 billion in 2017 amid a strong US market and a recovery in greater China, as per the report from De Beers. US demand rose 4% to $43 billion for the year as the key market enjoyed a strong economy and robust consumer confidence. The nation was the leading driver of global growth for the fourth consecutive year and represented more than half of total demand. The phenomenon of consumers buying pieces for themselves expanded to 33% of all US diamond-jewellery purchases, fuelling the overall increase. Demand in mainland China increased 3% in local currency, and grew 1% in dollar terms to $10 billion, De Beers said. That came from an improvement in economic conditions in the second half of 2017, as well as a 20-year high in consumer confidence. The Hong Kong diamond market also recovered amid stronger local demand and a revival in spending among tourists from the mainland. Demand in India, Japan and the Gulf declined by a low- single-digit percentage in dollar terms due to economic factors, as well as the impact of regulation and exchange-rate fluctuation. Demand increased in other markets around the world. The outlook for demand growth remains positive in most of the main diamond- consuming countries, based on solid world economic prospects, positive consumer sentiment and continued investment from the diamond industry in category marketing. India s Polished Exports Rise - India s polished-diamond export grew 14% in April, according to data released by the nation s Gem & Jewellery Export Promotion Council (GJEPC). Shipments increased year-on-year to $1.99 billion for the month, with the volume of exports rising 17% to 2.8 million carats, the GJEPC figures showed. The average price of exports decreased 2% to $719 per carat. Polished imports slumped 38% to $114.4 million, resulting in net polished exports calculated as polished exports minus polished imports rising 20% to $1.88 billion. Rough imports fell 13% to $1.52 billion, while rough exports dropped 35% to $77.5 million. Net rough imports, representing rough imports minus rough exports, slid 11% to $1.44 billion. India s net diamond account (total rough and polished exports minus total imports) rose to $441.4 million in April from negative $58.7 million a year ago. Diamond Futures v/s Spot Price Movement 3500 Diamond Futures v/s Spot Diamond Prices Diamond Futures Prices (in Rs) Diamond Spot Prices (in Rs) Currencies & Commodities Performance in May 18 Currencies Performance May'18 (%) Non-Agri Commodi es Performance May'18 (%) Dollar Index Indian Rupee EUR/USD GBP/USD India 10-yr Bond Yield Spot Gold ($/oz) Spot Silver ($/oz) Spot Diamond 1CT ICEX Diamond 1CT (Rs.Cr) LME Copper ($/tonne) Nymex Crude ($/bbl) PAGE 6

7 Circulars issued by Exchange Modification in tick size of DIAMOND 1 CT and DIAMOND 0.5 CT Contracts: The Exchange has revised the tick size of DIAMOND 1 CT and DIAMOND 0.5 CT for all the running contracts and yet to be launched contracts. The tick size is revised as mentioned here under: Underlying Existing Tick Size Modified Tick Size DIAMOND 1 CT Rs.1 Rs (50 paisa) DIAMOND 0.5 CT Rs.1 Rs (25 paisa) Charges of Vaulting, Logistics and Grading Agency Details of Vaulting Agency & Charges Name of the Vault Name of the Commodity MALCA - AMIT JK LOGISTICS PVT. LTD. CUT & POLISHED (ICEX) DIAMOND Diamond Deposit Address (To be deposited by seller) Mumbai J-Tower, Ground Floor, Office Number 8 & 9, Within Customs Area, BDB, BKC - Bandra (E) Mumbai Surat C-601, Diamond World Mini Bazar, Varacha Road, Surat Delivery Location Surat: C-601, Diamond World Mini Bazar, Varacha Road, Surat : Contact Person Details Mr. Oommen Mathew: / mathew.ind@malca-amit.com Mr. FalgunRaut : / / 0200 falgun.ind@malca-amit.com Deposit Location, Day & Time Day Time Location Monday to Friday 10:30 AM to 3:00 PM Mumbai & Surat For list of holiday at vaulting & logistics agency kindly visit Vaulting Charges Stone Handling Charges 0.30 Cents 0.50 Cents 1 CT Billing Cycle 10 Paisa 15 Paisa 25 Paisa per day Percent Rs.750/- (Per client per day) excluding taxes, if any. This is applicable both at the time of deposit and physical delivery. Details of Grading Agency & Charges Commodity Grading Agency Name Contact Person Name Contact Number Cut & Polished (ICEX) Diamond Cut & Polished (ICEX) Diamond International Institute of Diamond Grading & Research (IIDGR) (A part of De Beers Group of Companies) Gemological Institute of America (GIA) Mr. Saroj Kumar Nanda Mr. Amar Ranjan Swain From (Carat) To (Carat) Grading Fee & Sealing Fee (in INR) /41 Remarks Full Grading Report shall be issued. In case of IIDGR Full Grading report will be issued. In case of GIA Dossier will be issued. In case of IIDGR Full Grading report will be issued. In case of GIA Dossier will be issued. PAGE 7

8 MEDIA COVERAGE JUNE PAGE 8

9 Economic Indicators Date Time (IST) Country Event Impact 01-Jun-18 14:00 UK Manufacturing PMI High 01-Jun-18 18:00 US Average Hourly Earnings High 01-Jun-18 18:00 US Non-Farm Employment Change High 01-Jun-18 18:00 US Unemployment Rate High 01-Jun-18 19:30 US ISM Manufacturing PMI High 04-Jun-18 14:00 UK Construction PMI High 05-Jun-18 14:00 UK Services PMI High 05-Jun-18 19:30 US ISM Non-Manufacturing PMI High 06-Jun-18 14:30 India Interest Rate Decision High 08-Jun-18 Tentative China Trade Balance High 09-Jun-18 07:00 China CPI High 11-Jun-18 14:00 UK Manufacturing Production High 12-Jun-18 14:00 UK CPI High 12-Jun-18 14:00 UK Goods Trade Balance High 12-Jun-18 14:30 EU German ZEW Economic Sentiment High 12-Jun-18 17:00 India Industrial Production High 12-Jun-18 17:30 India CPI High 12-Jun-18 18:00 US CPI High 12-Jun-18 18:00 US Core CPI High 13-Jun-18 14:00 UK Claimant Count Change High 13-Jun-18 14:00 UK Unemployment Rate High 13-Jun-18 18:00 US PPI High 13-Jun-18 23:30 US FOMC Economic Projections High 13-Jun-18 23:30 US FOMC Statement High 13-Jun-18 23:30 US Federal Funds Rate High 14-Jun-18 00:00 US FOMC Press Conference High 14-Jun-18 07:30 China Industrial Production High 14-Jun-18 12:00 India WPI Inflation High 14-Jun-18 17:15 EU Main Refinancing Rate High 14-Jun-18 18:00 EU ECB Press Conference High 14-Jun-18 18:00 US Core Retail Sales High 14-Jun-18 18:00 US Retail Sales High 15-Jun-18 Tentative Japan BOJ Policy Rate High 15-Jun-18 Tentative Japan Monetary Policy Statement High 15-Jun-18 18:30 India Current Account High 15-Jun-18 19:30 US Prelim UoM Consumer Sentiment High 18-Jun-18 All Day China Bank Holiday on the eve of Dragon Boat Festival Low 19-Jun-18 18:00 US Building Permits High 20-Jun-18 18:00 US Current Account High 21-Jun-18 16:30 UK Monetary Policy Summary High 21-Jun-18 16:30 UK Official Bank Rate High 22-Jun-18 All Day All OPEC Meetings High 26-Jun-18 19:30 US CB Consumer Confidence High 27-Jun-18 18:00 US Core Durable Goods Orders High 28-Jun-18 18:00 US Final GDP High 29-Jun-18 14:00 UK Current Account High 29-Jun-18 14:00 UK Final GDP High PAGE 9

10 DISCLAIMER: This newsletter is meant solely for use by the recipient. The newsletter does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of the entities. This publication is based on information that we consider reliable, but we do not represent that it is accurate or complete, and it should not be relied upon as such. It is not directed or intended for distribution to, or use by, any person or entity who is a citizen or resident of any locality, state, country or other jurisdiction, where such distribution, publication, availability or use would be contrary to law, regulation or which would subject ICEX to any registration or licensing requirement within such jurisdiction. ICEX, its directors, officers, analysts or employees do not take any responsibility, financial or otherwise, for any losses or damages that may be sustained due to the investments made or any action taken on the basis of this Report. While all efforts have been taken to check the accuracy of the information provided herein, we do not warrant that it is free from any technical inaccuracies or typographical errors. ICEX shall not be liable for damages of any kind arising out of or in connection with the use of the information in this publication. Corporate Office: Reliable Tech Park, 403-A, B-Wing, 4th Floor, Thane-Belapur Road, Airoli (E), Navi Mumbai , India Tel.No: Fax No: GSTIN: 27AABCI9479D1ZA Registered Office: 1st Floor, Office-109, Nodh No to 63/65/9, Hat Faliyu, Mahidharpura, Surat, Gujarat , India Tel. No.: / GSTIN: 24AABCI9479D1ZG PAGE